We witnessed the second- and third-largest bank collapses in history over the last few days. 

A lot of regional and community banks are still under pressure. There could be more failures based on leverage on deposits. 

But that’s not my focus today. A lot of people are expecting the Fed will NOT raise interest rates at all in March. They’re expecting a pause – even though inflation still remains hot in this economy. 

Let’s take a bigger step back. A so-called “Pivot” in the market will not produce the Bull market rally so many people expect.

Why is this? History.

Let’s Check the Charts

A friend of mine sent me this chart about three months ago. I should probably print it and keep it in my wallet next to a picture of my daughter. 

Given the sheer number of questions I receive about the market on a daily basis, I’ll probably end up showing this chart more than her picture…

The Fed will eventually pivot, cut interest rates, and maybe increase its balance sheet all over again. This is how the system works. It’s built on cheap debt and a flimsy house of cards. 

To prevent a total collapse, the Fed will eventually need to move back into the accommodation phase. 

That said, we don’t tend to see a bottom at that time. Yes, we did bottom out in March 2020 once the Fed implemented a massive emergency printing regime. But that was not a pivot. 

It was simply a response to the pandemic as the market was in a very bullish phase before the downturn.

In nearly every big crash before 2020… the pivot took months – and even more than a year – to find a bottom.

Today’s S&P 500 will likely follow this pattern of a selloff coming long after the Fed’s pivot. My expectation is that we’ll bottom out within nine to 12 months from the Fed’s pivot. 

That said, it doesn’t appear we have reached this point just yet.

The sudden collapse of these two banks will force other banks to be far more conservative in the future. 

We’ll likely see banks defensively hoard cash, take less risky loan portfolios, and increase demand for higher credit standards. This trend would be bearish for the economy, as fewer banks want exposure to credit risk. It reduces lending, which pulls money from the system.

Where to Focus Now?

We have a very serious crisis evolving in the banking sector right now. 

Traders are slinging community and regional banks like they were trading meme stocks back in 2020. Quiet, conservative banks have become a primary target for day traders. 

I think there will be a significant opportunity to buy banks on the cheap side, but it’s going to require patience in the months ahead. 

The entire banking sector received a downgrade from Moody’s over worries linked to the economy and loans. 

Even if the Fed does pivot, the damage has largely occurred. As a result, investors need to take a step back and understand the risks and opportunities for the future. 

Tomorrow, I’ll be joining Don Yocham and Jeff Zananiri on a special Banking Crisis edition of “Roundtable LIVE” at 10am ET. 

Yields are plunging at a rate that we haven’t seen since the 1987 crisis, the days after 9/11, or after the collapse of Lehman Brothers. 

Tomorrow, we’ll discuss the probability of infinite Quantitative Easing, the likelihood of a Fed Put, and what to consider ahead of the Fed Open Market Committee meeting next week. 

Bookmark your calendar for 10am ET tomorrow and join us at this link. 

I’ll see you there. 

To your wealth,


Garrett Baldwin

Market Momentum is Red

Momentum remains very negative despite today’s short-term pop. Markets were clearly oversold on Friday, and a short-term run seemed inevitable. We’re adequately hedged against a dramatic crisis over at Tactical Wealth Investor.  To know what to buy now and how to focus on inflation-busting returns, go here.

When our momentum reading went negative last week, I didn’t know that we’d have the second largest bank failure in U.S. history occur three days later. All I knew was that it went negative… and that we got out of the way. 

We added a hedge with the Proshares S&P 500 ETF (SH) to our long-term portfolio, we took gains on Mosaic (MOS). We also secured a big win on Pangaea Solutions (PANL), which has been in a freefall from our stop. I sleep better at night by using my signal to eliminate my bias… 

But there’s a lot of panic and a lot of fear in this environment. 

And I want to address your concerns right now.

Something Broke. Now What?

The SVB Financial collapse is the “thing” that the Fed broke. 

But did the Fed really break it? 

It depends on how you define the person cracking the eggs. SVB’s financial conditions were largely due to a classic maturity mismatch. 

The company owned a significant amount of long-duration mortgage bonds at a time when its clients’ industry was experiencing the biggest drawdown in capital allocation in years. 

A classic bank run ensued. 

It’s bizarre to me that the bank’s investments – perhaps some of the most conservative and boring products on the planet in actually safe bonds – were the culprit. 

But given the Fed’s aggressive rate hikes, the value of those bonds fell, and the bank’s net asset value was stressed when one looked at the value of the bonds. 

This is another accounting scandal if we really unpack it. The banks don’t have to mark these bonds to market on their balance sheet. 

So, you know that the bonds are underwater, and the bank knows that the bonds are under water, but it doesn’t show up in their share price because the balance sheet doesn’t include these assets. 

Why banks are buying long-term duration bonds in a cash-intense business makes little sense. But here we are. 

Whether it was the accounting scandals of the Enron years, or the Dodd-Frank rules that addressed the Lehman efforts to keep toxic assets off their balance sheet, we always end up in the same place. 

The Fed creates perverse incentives… and the risk-takers find a work around. Then the moral hazard is exposed, and we have a dramatic effort to shore up the system. 

Why? Because no one bothered to revisit the very things that have caused so many other crises: Leverage, liquidity, and balance sheet tricks.

What Happens Now

Unless the Fed just starts dumping money from the sky, I expect that economic conditions will tighten. But the Fed is in a very tight corner. To do so would invite much more inflation, and would rival the soft default on debt by the Bank of England in October. 

Further tightening exposes an already weakening economy to greater liquidity challenges. 

What’s so interesting about this situation is that it wasn’t a bailout of shareholders: It was a bailout of the entire banking system – and they’re about to realize that there is far more exposure than they thought over the weekend. 

Everyone who is involved in this should lose their job, but we are not an accountable country. And we now have the people who created this crisis in charge of solving this crisis. It’s the same as it ever was.

With that said, if you have money in a bank don’t panic. You have deposit insurance for up to $250,000. If you have more than this in a bank, consider diversifying across various institutions. 

We’ll likely see banks find ways to partner with other banks to swap excess deposits. Of course, that just points out the pointlessness of the entire FDIC system. 

Meanwhile, as an investor, consider focusing on the long-term, and make sure that you follow my momentum writing so that you know when to hedge against downside. 

I give you this reading for free, every day, and it has shown stunning accuracy at pinpointing when to buy and sell. 

Again, it’s free. All you have to do is learn how to trade it. 

The good news for Tactical Wealth Investor readers is that they already have a copy of my “Six Ways to Trade Negative Momentum” in their hands. Become a member right here. 

To your wealth,


Garrett Baldwin

Market Momentum is Red

We’re well hedged, and we traded this very well from a long-term investor perspective. I’m not worried about the banks because the Fed will always backstop the economy. Do you honestly believe that we would have another Depression? No, we’ll just drop money out of the sky like always. But if you want to know where to put your money, you need to focus on the next 18 to 24 months. It all starts with our value and income plays over at Tactical Wealth Investor.  

First, the S&P 500 fell off a short-term high as momentum continued to break lower. Then, it retested that critical 200-day moving average at 3,940… and broke lower late Thursday.

We’ll see how the market performs over the next two weeks. 

After today’s jobs report, there are more questions than answers on what comes next. The Consumer Price Index (CPI) and the Producer Price Index (PPI) are set to bring fireworks next week. 

Then on March 22, 2023, we’ll get a decision from the Fed on interest rates. Before Friday’s jobs report, the probability of a 50-point hike on the Fed funds rate hit 80%. 

Now is the time to start planning. What happens if this market REALLY sells off in the coming weeks? What do I do with my money? 

I want to show you that opportunities will form in the long term. And it all starts with the help of… who else?

Danny DeVito.

Other People’s Money

Everyone loves the movie The Big Short, the iconic tale about greed and the financial collapse of 2008.

People love the film Wall Street because of the chatter about “greed” being “good” and the fact that money never sleeps in the world’s economy.

My favorite financial film is Margin Call, which tells the tale of an investment bank ditching worthless assets before the rest of the market catches up to their scheme. The only character in the film with any level of redemption is probably a dog.

But if you’re a value investor, it’s hard to argue against the 1991 classic Other People’s Money. 

The film stars a slightly miscast, but still excellent Danny DeVito. 

He plays a fund manager named “Larry the Liquidator,” a notorious, activist shark who buys up shares in undervalued companies and then forces their sale to a bigger company.

Ben Graham and Warren Buffett would be proud of this character.

Larry targets a small-town conglomerate called New England Wire & Cable Company in the film. He also falls in love with the founder’s daughter, but that’s not really important…

When he meets the founder, he explains that he values all of the company’s assets at $125 million – the land, the fully funded pensions, the machines, and anything that could be sold at auction. 

In a worst-case scenario, the company might be worth $100 million or $25 per share. 

Larry’s looking for a bargain. And when he scanned a list of companies that looked cheap, he discovered that the stock was trading at $10 three weeks prior. 

“That’s a 10 for a $25 item,” he says. “What a sale.”

Larry sees a 150% upside. 

Welcome to the Liquidation strategy.

What Is This Strategy

Here’s how it works…

Larry values all the real estate, fixtures, equipment, and inventory. 

He comes up with what is known as the “rational liquidation” value of the company. 

That’s $25. That would be the tangible book value of the company.

In a market where things are falling, many companies start to trade under their liquidation value. This means if the company went belly up or sold tomorrow, the shareholders would receive at least the tangible book value of the company. 

Now, this might sound too simple, right?

But it’s a classic investing strategy that takes a rational valuation of the company going to auction… and determines what the company is worth at effectively scrap value. 

We use tangible book value to find some of these names and then assign a rational value of what it would be worth in a worst-case scenario. 

Excluding financials, real estate, and healthcare, 287 companies are trading under the tangible value. But let’s add a Z score – reducing the bankruptcy probability – and focus on companies that make stuff. 

27 names pop up with a Z score over 3 and operate at under 80 cents on the dollar. Now, add a strong F score, and you’re in business. 

We have two names that pop up. 

First, NAACO Industries (NC), a dirt-cheap value stock that operates in the coal and lithium mining space. It’s actually a member of our value stocks in the Tactical Wealth Investor. 

Second, Tandy Leather Factory (TLF). 

This stock trades for $4.40, but has a tangible book value of $6.15. It only makes $81 million a year in revenue, which means that institutions aren’t paying any attention. 

Its F score is 7, and its Z score is 4.19. Its debt-to-equity ratio is very low, and even fair value puts the stock around $5.10. 

Let’s put the stock at auction at a whopping 85 cents on the dollar. 

That’s a price of $5.22. 

And that’s an 18.6% upside from today’s share price.

Odds are you didn’t even know this opportunity existed.

So, let’s put it all together with Danny DeVito and a leather jacket.

You’re welcome, America.

A quick bit of housekeeping here before you go… 

IN CASE YOU MISSED IT: Starting around the middle of next week, WealthPress Hub will be coming to you under – and from – a new name: TradingPub. 

You’ll still hear from me every day. And I’ll continue to send you popular articles from other top market experts. 

I’ll tell you more about what you can expect on Monday. 

To your wealth,


Garrett Baldwin

Market Momentum is Red

The S&P 500 broke much lower, and remains red after the jobs report on Friday. There is a lot of action right now, with the markets facing the CPI and PPI numbers next week. Also, don’t forget that Quad Witching will hit us next Friday. If you’re tired of all this back and forth, consider going long with the best inflation-beating stocks. It all starts with our value and income plays over at Tactical Wealth Investor.  

The term received international recognition after the American scholar Suzanne Massie taught it to Reagan during his presidency. It actually harkens back to phrases used by Lenin and Stalin, which warms no one’s hearts.

Today, I want to talk about our own version of “Trust but Verify” in the markets. As a quantitative analyst, I spend a lot of time digging into numbers and looking for value. 

I want to talk about why qualification is so much MORE important. The numbers only tell you so much.

The “verification” tells you the truth.

Avoiding an Error

When we think about value, we go back to the Buffett adage that price is what you pay, but value is what you get. 

One of my preferred long-term, value-oriented approaches is to combine the work of Stanford professor Joseph Piotroski and the Godfather of Value Investing, Ben Graham. 

We combine strong balance sheet analysis with the Piotroski F score with the value metric of the Graham number.

The F Score gives us a strong analysis of the companies with shareholder’s interest at heart. 

As I’ve explained in previous articles, the F score rewards companies a point for every positive action on Piotroski’s list. 

An annual increase in “Return on Assets” generates a point. The effort to reduce outstanding shares generates a point. The action to reduce leverage and debt, gives a point. 

We are always looking for companies with a score of 7 or more. 

On the Graham side, we use the Graham number to define a defensive value on each stock. 

A Graham score is a specific metric that tells us what a value investor should be comfortable paying. It represents a rather complex bit of high school mathematics that involves the company’s earnings per share and its book value.

The combination of strong F scores and low Graham numbers (typically looking under 0.50) gives us a list of about 40 names to examine. 

There are plenty of energy names, housing stocks, natural gas players, and developers of the things we need. Value exists within this list… 

But when we look at it, we also see a few names that stick out. 

Names like American International Group (AIG)… 

And even a name like Silvergate Capital Corporation (SI). 

This is where the verification process starts.

Trust But Qualify

As an investor, the most important question you should ask is… “Why?”

Why is this opportunity now presented to me in this specific market?

Why is a company like Silvergate Capital – with an F score of 7 and VERY LOW Graham number giving me this chance to own it?

Well, once you look under the hood, you’ll find a company going out of business. 

Silvergate announced last night that it will liquidate its bank holdings, as the fallout from its relationship with cryptocurrency giant FTX accelerates. 

That said, the “value opportunity” in Silvergate emerged a few weeks ago. That’s when the stock pulled back and presented this opportunity. By digging under the hood, one could have determined that significant risk existed. 

What exactly does this company have as collateral? Bitcoin? What does it make that can be sold at auction if something goes wrong? A bunch of debt obligations?

It’s not enough just to look at the numbers and buy the stock…

You must remember that when you purchase a stock, you’re buying a business. Oil, housing, food commodities, and the other things we need as good businesses for the long-term.

A leveraged bank with massive exposure to crypto isn’t “Value.”

It’s a liability. 

And it proved so this week. 

Remember, if you want to know the best stocks that meet these value requirements, I can do all of the qualifying for investors. In fact, I also explain why these opportunities exist in my Tactical Wealth Investor.

We just sold one of our value stocks at nearly a 20% return (since late December), and now we need to add a new stock that is trading at a deep discount. I’ll unveil that name next week. 

For now, you can sign up at our Charter Member price and take advantage of the massive upside of our value portfolio over the next 18 to 24 months.

A final item…

IN CASE YOU MISSED IT…

Starting around the middle of next week, WealthPress Hub will be coming to you under – and from – a new name: TradingPub. 

You’ll still hear from me every day. And I’ll continue to send you popular articles from other top market experts. 

I’ll tell you more about what you can expect on Monday. 

To your wealth,


Garrett Baldwin

Market Momentum is Red

The S&P 500 tested the 4,000 level a few times today, but now we’re starting to see some level of choppiness ahead of the February jobs report. Investors should ignore all of this noise and focus on the long-term potential once the Fed finishes its rate hikes and turns its attention to stabilizing the economy. It all starts with our value and income plays over at Tactical Wealth Investor.  

Did you miss this week’s Roundtable with Don Yocham? Catch the replay video above…

And be sure to join us at 10 a.m. ET each Wednesday for the Trading Pub Roundtable, where our market and economics experts will discuss the biggest news affecting Wall Street price action — and how to trade it.

In this week’s roundtable, we covered:

• Liquidity and a tight Fed: Financial conditions continue to loosen despite the Fed’s tightening
• Celeste is seeing some interesting shifts in how investors are positioning between growth and value
• Garrett sees some incredible buying opportunities in several key resource stocks
• And much more…

Be sure and tune in every Wednesday at 10 a.m. ET for the Trading Pub Roundtable with Don Yocham!

As expected, Powell threw the markets a bone by stating that the Fed Open Market Committee is still debating between a 25-point or 50-point Fed Funds rate hike during its two-week meeting. 

Powell’s appearance overshadowed another big development for the markets. 

While everyone focused on a surprise drawdown on U.S. crude oil inventories (helping to push prices up), Warren Buffett’s Berkshire Hathaway (BRK.A) made headlines. 

The conglomerate purchased another 5.8 million shares of Occidental Petroleum Company (OXY), boosting its holdings to roughly 22% of the stock. 

Occidental is one of my favorite stocks to trade. 

And today, I’ll show you one of my favorite options strategies to boost income, increase your chance of winning and the specific metrics that catch my attention. Let’s dive in.

Occidental Has a Steep Upside

Occidental is a major player in oil production in Texas. If you’re a baseball fan, prepare to see a lot of Occidental advertising on the jerseys of the World Series Champion Houston Astros. 

The company got a pop this morning up to $63.50. 

But with momentum weakening in the process, the stock has pulled back under $62.00 today. Occidental has an average price of $73.00 from Wall Street analysts with a larger upside of $84.00. 

I think the upside is higher. I say $90.00, and it’s largely based on a very simple metric. 

When the company’s debt gets back above Investment Grade, it’ll be a very attractive opportunity for institutions. 

Occidental is right below Investment Grade, sitting at BB+. As the company continues to pay off its debt, increase its dividend, and buy back stock, it’s going to be even more attractive. 

OXY currently has an F score of 7, but it’ll increase that figure due to buybacks in the future. In addition, it trades at a very low Enterprise Value to Earnings Before Interest and Tax (EV/EBIT) of 5.6x. 

Its net margin is north of 36%, which is historically strong against the industry and its relative historical performance. 

And then there’s Warren Buffett. 

Berkshire Hathaway has permission from regulators to buy up to 50% of the company. Knowing how and where Buffett buys the stock is very important. Take a look at the chart below. 

Occidental has been a terrific momentum stock in the last 15 months. 

However, it bottomed out on three occasions in the last year.

First, during the massive hedge fund dump during June 2022. 

Second, during the global liquidity challenges in October 2022 (thanks a lot, United Kingdom). 

And third, a recent downturn linked to a lack of financial interest in oil from commodity traders due to recessionary concerns. 

In each case… Buffett has bought the stock.

Berkshire isn’t buying up shares when the stock pops above $70.

Berkshire is stalking – waiting to buy OXY when it gets back around $60.

Here’s the recap of Berkshire’s buying activity over the last year…

You should follow this pattern as well.

How do I Trade OXY?

You could build a trove of OXY stock like Berkshire if you’d like, but there are better ways to trade it.

The best way is to sell a put spread on OXY in positive momentum conditions. So, when capital is flowing into the market – and the energy sector, I like to go back down into the $50s and sell spreads. 

I start by going out 45 days on OXY and find an attractive price where I’d be content to own the stock. Given that Buffett has liked buying the stock around $58, I keep my eye on the $57.50 put.

If I sell that put, and the stock falls under that level, I’ll be assigned the stock. However, I am betting that it either won’t get to that level, or I’LL GLADLY buy the stock because it’s likely set to rebound (when Buffett likely makes another purchase). 

Typically, if I’m selling a $57.50 put, I will need to put up a significant amount of margin. In the case of OXY, the April 21, 2023 $57.50 put costs about $1.37. 

This means, I’d only generate about 2% on my return if I just sell a cash secured put. I’d also need about $5,613 in margin. 

That’s not what I want. 

So, I can buy the $55 put and protect myself in the process. If the stock falls under $55, the most I can lose is the margin between the $55 and $57.50 spread. 

If I sold this spread, I’d require about $194 in margin to make $56 over the next 45 days. That’s a 28.9% return with a probability of profit of about 74%. 

Now, this is strictly an educational trade. Why? Because momentum is negative. But if we go positive, and capital flows into the market, this would be a great trade for three reasons.

1. If the stock goes up, the value of the spread goes down. As a result, we make money.
2. If the stock just trades sideways, the value of the spread will decay. As a result, we’d make money.
3. If momentum is positive and the stock pulls back, we’d be happy to own it at a lower level. But if momentum goes negative, we can just cut our losses and look for an opportunity to reenter this position. 

Rather than expose ourselves to $6,100 in equity risk today, it’s really clean to trade these put spreads and seek optimal gains. 

This trade itself offers an annualized return of 234% – meaning you can do this over and over again in the optimal conditions – and make nice gains on lower-risk strategies.

To your wealth,


Garrett Baldwin

P.S. Head’s up that change is a-coming to this WealthPress Hub free newsletter. We’re sprucing up with a new name and new look. I’ll be sending you more information on this in the coming days!

Market Momentum is Red

The S&P 500 tested the 4,000 level a few times today, but it’s finding resistance. These rejections have been sharp and swift, and investors need to pay close attention. When momentum is red, things can sell off quickly. These little rallies are designed to pull people back into the market so that funds can sell. Remember, the purpose of a market is to sell. 

But let’s just say it was “Bearish.”

And bloody.

Much like the selloff that we might be facing in the coming week. 

Federal Reserve Chair Jerome Powell spared no punches today about the state of economic data. He warned that interest rates would need to increase to combat inflation. 

Isn’t it ironic that he had to explain to the Senate that inflation is hot… after all that money they spent last year.

What’s Happening Right Now?

As I’ve noted over the last week, the markets remain focused on key support levels of 3,990. That figure is the top of the channel from the trend of 2022. The trend of lower highs and lower lows dominated the landscape of last year’s trading. 

Last week, the 3,990 level was critical, and the 200-day moving average acted as support after a year of acting as resistance. 

But something is off in this market. As I’ve explained, in previous selloffs, we’ve witnessed short-term squeezes that last two to three days. This happened last year in April, August, and December. 

Then, the markets took a nosedive. With the two-year Treasury bond now at the highest level since 2007, I have to anticipate that funds will be happy to collect risk-free returns and punt the equity risk. 

Meanwhile, if we move under the 200-day moving average, I expect a steep departure from the “Buy the Dip” crowd that has furiously purchased off any downturn since October. That key point may also be where retail investors dump stocks indiscriminately. 

As funds continue to dump stocks on the short-term bounces, we could see a dramatic acceleration of selling in the coming days. 

First, Powell will speak to the House of Representatives tomorrow (a group that understands basic economics even less than sitting Senators).

On Friday, the U.S. jobs report will tell us the state of the employment market. That report should show job growth and higher wages as services inflation remains sticky. 

Next week, we’ll have an update on the Consumer Price Index (CPI) and the Producer Price Index (PPI), which should also be elevated compared to the December report. And finally, Quad Witching occurs NEXT Friday. 

I’m tilting bearish with these key resistance lines approaching and questions appearing about the state of the economy.

What to do Right Now

If you’re a long-term investor, I encourage you to pick up a copy of my report, “How to Trade Negative Momentum.” This is FREE and worth the price of admission to my Tactical Wealth Investor service. 

Inside you’ll learn not only when to buy stocks should this selloff take us much lower, but also simple options strategies that will reward your patience and portfolio. I break put spreads and cash-secured puts down for you in a very simple manner. 

In addition, you’ll have access to a portfolio of value and income stocks that are crushing the market in 2023. In fact, we’re closing two positions that offered north of 25% returns in the last 65 days. 

We’ll also add a new hedge position to take advantage of weakness in this economy. Join me for the Charter Member’s Price, right here. 

You can’t beat this deal.

To your wealth,


Garrett Baldwin

Market Momentum is Red

We’ve added our hedge position with the Proshares S&P 500 Short ETF (SPY) again for the Tactical Wealth Investor. We’re also taking gains. This feels very similar to the April, August, and December selloffs, which means this market could move MUCH lower, quickly. You’ve been warned. 

One unusual component of my S&P 500 plan for February 2023 was the impact of a strong January off of a bear market that was contrary to what most expected. When this happens, as it did in January, February often closes higher.

On the flip side of my February plan was the 200- and 50-day moving average crossover at a major support area. The yellow box below drew attention to it.

All in all, the projection of my plan looked like this:

After Presidents Day on Feb. 20, the market was bombarded with unwelcomed Consumer Price Index (CPI), Producer Price Index (PPI) and Federal Reserve news. February’s second half then made history for its price action.

Note the response to the month open (blue highlights).

Note the response to the dotted line (more blue highlights).

Finally, note the month close right between the 200- and 50-day moving averages spread.

Why is this important? 

Here’s what I wrote last month:

If February closes strongly to the downside after the recent December and January move in price action, then thoughts on a solid first quarter or year end must be reconsidered. In other words, the trend in place from October needs to be reevaluated.

March is next.

The first four days have shown constructive strength. With Fed Chair Jerome Powell speaking twice this week, I don’t expect that to last… assuming his personality hasn’t changed.

Pandemic-driven economic repercussions continue to resolve, as displayed in the data, giving hopes of a stronger March. While not thrilling to live through and often questioned, less bad news has a way of lifting the market.

Caution remains, however… For one, the 200- and 50-day moving average spread is still very much in play for March.

Keep this in mind — this is very important…

The major support occurring right now because of the two moving averages does not last forever. History is revealing. Check it out for yourself and decide how you think this will play out, and when.

Another area that has my attention in the short term is the orange box where mid-month CPI, PPI and Fed news come back into play.

All this to say: March winds can be volatile. 

Trading with multiple strategies remains key in Q1. Doing so will likely give you insight into the summer months ahead, which is a very important topic we’ll revisit soon.

Think and win!

Celeste Lindman
Celeste Lindman Trading

P.S. US EMERGENCY: Oil Inventories at Lowest Levels Since 1983 — No. 1 energy play

Oil inventories are the LOWEST they’ve been since 1983 here in the states… And another massive surge in energy prices is looming… So Jeff Zananiri is going LIVE at 1 p.m. ET TODAY, March 7, to break down his No. 1 “Supercycle” energy play! 

Not only will he hand you his top play for free… But he’ll also show you the hedge fund trick he uses to find these plays… 

The same strategy that returned:

• 218.87% on EEM in 30 days.
• 146.76% on IWM in 42 days.
• 35.14% on UBER in 19 days.

So Make Sure You Register Here!

Past performance is not indicative of any future results. Trade at your own risk. From 1/1/22 to 3/6/23 the win rate is 63.6% on the stock, the average return per trade on options is 8.44% (winners and losers), and the average winner is 138% with an average hold time of 31 days.

Powell will testify for two days on the state of monetary policy and the economy. Given that less than 20% of Congressional members have any background in economics, I think the man is wasting his time. 

Congress has been a cruel antagonist to the Fed’s efforts to reduce inflation in the nation. It authorized trillions in spending last year – with no clear path to sustainability. 

In addition, the White House has really put the screws on the Fed in two ways…

First, the Treasury Department is pumping money into the system thanks to its “extraordinary circumstances” to avoid a national debt default. 

Second, there’s no real supply-side solution to increasing the vital commodities that will likely be in shortage in the future: Food, energy, housing, and more. 

This is an unserious group of bureaucrats who don’t live outside the Washington bubble. 

Finally, the Fed faces other constraints from its colleagues in other nations. The Bank of Japan and the People’s Bank of China have provided ample liquidity to the global system. 

There’s just one problem: Eventually this stuff will dry up. 

What will the solution be? Probably more money printing. 

But if that’s not possible, we’ll have another liquidity challenge ahead.

What’s Next

If you want to predict the direction of the S&P 500, just pay close attention to the balance sheets of central banks around the world. 

As this chart from Yardeni Research shows, there is a direct causal relationship between central banks’ balance sheets and market performance.

Yet, as we can see, the markets quickly become addicted to cheap money. 

The selloff of 2010 – after a massive round of liquidity – prompted the Fed to engage in another amplified round of Quantitative Easing. 

Then came 2014, when central banks in Europe decided that austerity (the process of tightening one’s belt) wasn’t sustainable. So, they engaged in another huge uptick in asset purchases. 

The result: Higher equity prices. 

Finally, in 2020, the central banks dumped trillions more onto the system in a process known as QE4. 

About 18 months later, however, inflation roared, and the banks had to start reducing their balance sheets. Surprising no one, the equity markets started to panic. 

The markets bottomed in October 2022 after the tightening nearly sank the British economy. Since then, liquidity has expanded, central banks have loosened, and the equity markets have rebounded. 

This can all run until… it stops.

The Fed Said What?

It’s fitting that over the weekend, I read a study by the San Francisco Federal Reserve Bank on the impact of loose financial conditions and the likelihood of financial crisis. 

The February 2023 working paper is called Loose Monetary Policy and Financial Instability.

And what do you know? Here’s part of the summary:

“Are periods of persistently loose monetary policy more crisis-prone? This section argues that the answer to this question is in the affirmative. We see significant estimates in the medium term, that is around horizons of 5 to 10 years. Financial crises are predicted by loose monetary policy several years ahead.”

Simply put, long periods of low interest rates, cheap assets, and irrational exuberance create crises. 

We’ve seen this happen multiple times over the last decade. It’s a real exploration into the “Alice in Wonderland” economic system that we’ve employed for the last two decades. 

We had the Dot-Com bust, the 2009 crisis, the 2011 European crisis, the China crisis in 2015, the Fed tantrum in 2018, the Covid Bubble of 2020, and the market reaction to tightening in 2022. 

This is not healthy…

Nor is it sustainable…

The paper concludes that “policymakers should take the dangers imposed by keeping policy rates low for long seriously, and thus weigh the potential short-run gains of loose monetary policy against potentially adverse medium-term consequences.”

Will they listen?

I doubt it. But it does tell us that more problems are ahead. 

Even if the Fed does “pivot” and starts buying up assets all over again. 

To your wealth,


Garrett Baldwin

Market Momentum is Green

Momentum turned positive last Thursday afternoon following the statement by Atlanta Fed Bank President Raphael Bostic. The central banker suggested that the Fed could pause on rate hikes. Well, now it’s clear that the central bank cannot pause on rate hikes. But enjoy the rally for now. We lifted our hedge position with the Proshares S&P 500 Short ETF (SPY) after momentum turned Green for the Tactical Wealth Investor. That’s incredibly bullish for the rest of our portfolio. Our January pick, Pangaea Logistics (PANL) is now up 29% since the start of the year. 

The markets were on fire Friday. 

The S&P 500 popped off the 4,000 resistance level and screamed into the close. 

What a difference a day makes. 

Yesterday, the S&P 500 was dangerously close to a dramatic break under the 200-day moving average. And then a magical messenger arrived to save the bulls from the depths of trading hell. 

Meanwhile, the Bears were torn apart. 

In a stunning development during the Thursday trading session, momentum miraculously turned green. And the heavens parted…

Thank You, St. Raphael

The S&P 500 was flirting with disaster yesterday. The critical 200-day moving average took us down to about 3,940. A break under that line in the last year has fueled dramatic selloffs.

Then, at around 1:30pm ET, Atlanta Federal Reserve Bank President Raphael Bostic said that the Fed could “pause” on its rate hikes by late summer. 

Bostic also said that he’d like to see rates increase by 25 basis points during the Fed’s meeting in two weeks. 

Now, here’s the thing…

Bostic isn’t a voting member of the committee. To be honest, who cares?

But it didn’t matter. The algorithms caught that headline and engaged in a massive feeding frenzy. Suddenly, we weren’t talking about a breakdown in the financial markets. 

We were talking about a move back to 4,050 level as soon as Friday. 

It didn’t take too much volume to get to that level. 

It just required a lot of short-covering mixed with low-volume bids. Even junk stocks like ChargePoint Holdings (CHPT), which missed earnings and revenue expectations BADLY, squeezed higher on Friday. 

The stock’s $10.50 call expiring on March 3, 2022 traded for $0.12 (that’s 12 cents) at 9:45 am. An hour later, that contract was up more than 650%. 

The stock was down as much as 10% at the open and nearly finished even.

This is what happens when momentum turns positive. Capital flushed into the market in a dramatic fashion. It creates incredible short-term rallies that can take up to new heights quickly. How high will it go?

Well, I think there’s a specific level to watch.

4,100 And Then?

Federal Reserve Chairman Jerome Powell will speak on Tuesday. 

And to me, this feels VERY reminiscent of the April, August, and December selloffs. We had negative conditions for a few days…

Then, we pushed higher on just a small amount of “good news…”

And then – straight down. 

Nothing has shifted in the economic data that would suggest this market is healthy, and not overstretched. We’re at 22x earnings. That’s not where bear markets bottom out. Historically, it is much lower. 

More important, consider the fact that our economic data is running hot on the back of expanded economic conditions. The problem is that we have hot jobs data, hot manufacturing data, and hot inflation numbers. 

People want to say it’s because “the economy is strong…” but the reality is that it’s largely based on an expansion of credit and leverage over the last few months. In October, economic conditions bottomed out. 

In November, credit conditions expanded, the dollar weakened, and consumption resumed. There’s usually a two-month lag on this economic effort. The problem is that it can’t last forever. 

This economy is going to hit a wall at some point – and liquidity will start to dry up once again. At that point, look for the market to face the consequences. 

For now, enjoy the short-term rally. My target is 4,100 which has been a major resistance level over the last year and source of selling. 

That said, the higher we go… the more pain there will be in the end. 

Be very cautious – and use any short-term rallies to take gains. 

To your wealth,


Garrett Baldwin

Market Momentum is Green

We lifted our hedge position with the Proshares S&P 500 Short ETF (SPY) after momentum turned Green for the Tactical Wealth Investor. And while the “loss” on the hedge was a meager 1%, we cheered as our top-performer Mosaic (MOS) eclipsed a 24% return to start 2023. Right now, we’re very worried about the possibility of much higher rates. That’s why we packed our money into one of the best business development corporations (BDCs) in the world. Now’s the time to buy after bond yields declined on Friday. You’ll be happy you owned this stock before March 15.